Draft oil and gas law entrenches divisions in Iraq

Cairo/Baghdad, Sep 18 (DPA) Iraq’s draft oil and gas law is nothing less than a proxy vote on the future of their country for many people in Iraq. Politicians from across the political and sectarian spectrum have expressed deep reservations over the draft law.

The draft law, which was approved by the Iraqi cabinet of Prime Minister Nuri al-Maliki in April and taken to parliament, establishes a framework for oil revenue distribution among Iraq’s provinces and determines how oilfields are developed and managed.


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The bill was originally scheduled for parliament approval before the assembly’s summer recess. However, many lawmakers are opposed to rush a law that would shape the future of Iraq’s oil industry and the issue of decentralisation for years to come.

Iraq has an estimated 115 billion barrels of proven oil reserves, the third largest in the world after Saudi Arabia and Iran, according to British Petroleum figures.

Many legislators have begun to see the law as a major threat to Iraq’s national interest regardless of people’s religion or sect. The secular Iraqi List, the Sunni Muslim Iraqi Accord Front as well as the radical Shiite al-Sadr Bloc are all united in their opposition to the draft law.

“The oil and gas law is one of the most dangerous laws and is extremely bad. It does not tally with the current situation in a country under occupation,” legislator Osama Al-Nujaifi, a member of the Iraqi List of ex-prime minister Iyad Allawi, told DPA.

Al-Nujaifi called for delaying ratification of the law and forming a national oil firm to be in charge of managing and increasing Iraq’s oil production.

Some legislators have also complained that different versions of the law are in circulation and lawmakers do not know which version to discuss.

“We are for enacting a law to regulate oil and gas production but we, in the Council of Representatives, have so far been confused as there is no final formal version that we can discuss and give our views on in a definite way. There are several versions and some have no annexes,” legislator Basim al-Sharif from the Shiite Islamic al-Fadilah Party told DPA.

“Many political blocs are bent on standing against this project. When a final draft is presented in parliament, discussing it in the presence of oil and gas experts will take a long time,” legislator Izz al-Din al-Dawla from the largest Sunni bloc, the Iraqi Accord Front, said.

The draft law, with its different versions, is also sparking fears and disagreements among politicians about its impact on Iraq’s federalism and the power balance between the different provinces.

Mistrust between Kurds, Sunni Arab political groups and the Shiite-led coalition government led to the collapse of protracted talks over a possible compromise.

Kurds in northern Iraq insist on their right to seal independent oil deals with foreign firms.

The parliament of the Kurdish Autonomous Region, where some of Iraq’s largest oilfields are, passed its own oil law in August and approved a move by its government to sign contracts with international firms even before the federal law is passed but Iraqi Oil Minister Husein al-Shahristani has described the Kurdish oil law as illegal.

Sunni Arabs, who grew accustomed to controlling Iraq’s natural resources under the regime of Saddam Hussein, are strongly opposed to a decentralised oil sector.

They have a vested interest in maintaining a centralised distribution of oil revenues, as the Sunni-dominated areas of central Iraq are relatively oil-poor compared to the country’s north and south.

Sunni Arabs fear that a decentralised oil sector would entrench their loss of power. As a result, a law on how oil revenues would be shared is now being drafted to accompany the oil and gas legislation.

The United Iraqi Alliance, the main Shiite bloc in the ruling coalition, has been seeking to rush the oil and gas law through parliament.

“I expect parliament to begin discussing the draft law in the next weeks,” legisltor Abbas al-Bayati from the United Iraqi alliance told DPA.

Iraq needed foreign investment to revamp its oil industry and increase export levels, al-Bayati said.

Oil production and sales account for nearly 70 percent of Iraq’s gross domestic product, and more than 95 percent of government revenues, US figures show.

However, over 100 Iraqi oil industry technocrats argued in a recent letter to parliament that insecurity would remain an impediment to foreign investment as long as Iraq was engrossed in violence.

Indeed, why then rush the legislation, is what many Iraqis are wondering about.

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